Raymond Wang and Eugenio Donati of AeroVect made airport vehicles drive themselves with under $200k

Raymond Wang and Eugenio Donati are co-founders of AeroVect, one of the most recent companies to join Xfund. AeroVect develops autonomous driving systems for logistics, beginning with baggage and cargo tractors in aviation.

After graduating from Harvard, Raymond and Eugenio launched the company last year. They’re currently hiring for several positions in the San Francisco Bay Area.

In our conversation, Raymond and Eugenio discuss the importance of understanding the customer, building a strong product culture, and why startups need to think beyond fundraising.

How was AeroVect founded?

Eugenio: Raymond and I were introduced by a mutual friend while trying to start a transportation club at Harvard. We are both passionate about aviation and transportation at large, and wanted to start a student club focused on these industries.

Having kept in touch since then, in the spring of 2020, we were catching up during quarantine and realized there was a unique opportunity to combine our understanding of aviation with vehicle autonomy, leveraging the temporary lull in air travel to pilot and deploy our autonomous driving systems at large airport hubs.

What led you to focus on the aviation industry?

Raymond: When we looked through the autonomous vehicle space, we noticed a few things: General autonomy — for example, robotaxis — are going to take a very long time, for the simple fact that the technology is just not there yet. It’s also very capital-intensive, and the environments are complex, with lots of edge cases. Instead, our thinking is that the transition to production-grade autonomy will happen first in highly constrained, structured environments like logistics.

Within airport logistics, there are numerous challenges these days: First is the labor shortage — you have crews turning over up to 160% at some hubs: workers come in, do their six months, and leave afterwards to entirely different industries. Second, you have the damage that can happen when operators are undertrained or distracted — when they collide with aircraft and other equipment, the consequences tend to be quite expensive.

Thirdly, when airline schedules are compressed by congestion pressures, tradeoffs end up being made between doing things safely and doing things quickly. Here, removing the human-in-the-loop when it comes to vehicle dispatch and mobility can have a huge impact for on-time performance.

Why was 2020 the right time to launch a company in aviation?

E: While it’s true that COVID has had an impact on the aviation industry, what we know is that air travel isn’t disappearing any time soon. Airlines and airports have seized upon the pandemic as an opportunity to find new ways of doing old things. While ground handling has largely stayed the same for the past 50 years, the industry is looking to the future instead of returning to the same operating models that have been around for decades. We are seeing incredible tailwinds with automation as a key focus within not just aviation, but also the logistics space overall.

How do your backgrounds help you work with the aviation industry?

R: When we think about how best to serve our initial beachhead, it comes down to really understanding the customer and building a reliable product. As a team, that means immersing ourselves within the customer context and delivering world-class engineering results.

My very first job was at Delta Airlines, where much of my strategy work involved optimizing on-the-ground operations inside the kind of environments where we deploy at AeroVect. Flying is also one of my favorite pastimes, and being a private pilot has definitely helped to provide some additional perspective into the tarmac context.

I studied computer science and machine learning at Harvard, but outside of school spent a ton of time in aviation. Prior to college I was an aerospace engineering nerd, and a side project of mine involved developing retrofits to reduce the transmission of airborne pathogens like H1N1 and SARS inside passenger aircraft cabins.

As it turned out, at the height of COVID the technology I patented was licensed for use in Airbus and Boeing aircraft. Working through the certification process for this airflow retrofit, I came to understand that the regulatory picture in aviation isn’t homogenous.

Compared to making modifications to aircraft itself, what we’re doing with AeroVect instead — working in a structured environment that just happens to have aircraft — is significantly more straightforward.

Eugenio’s formal background with airline economics helped us realize just how central the impact of ground handling logistics can be as our initial focus area. For us, having a sense of the customer’s operational realities helps us contextualize the autonomy we develop to best serve the domain.

How do you sell to the aviation industry as a relatively new startup?

E: Selling in the aviation space is very dependent on being seen as insiders. We have the background necessary to build autonomous vehicles, and we are intimately familiar with airport and airline operations. That’s the secret sauce: understanding the customer in context helps them see the possibilities with our technical solutions.

What’s the hardest part of launching a startup in the autonomous vehicle space?

R: In this space, there are a lot of moving pieces. We often come across companies that build reasonably functioning demo vehicles, but have a hard time transitioning to commercial operations. When we work with our customers, our priority is to make sure we are building a product that not only works well, but also solves their most pressing challenges.

Building the autonomy software stack is usually not the toughest challenge. The trickier and in some ways more important question that we are conscious to continually iterate upon is understanding what our customers truly desire, and how we can adapt our technology to best serve their most pressing needs.

What do you wish you had known when you launched AeroVect?

E: Starting and growing a business in the initial phases seems a lot easier than it is in reality. It’s easy to say, “Oh, we’re just going to hire some engineers.” Hiring can be challenging, especially in a space like autonomous vehicles, where talent is very specialized and is very well compensated. It’s tricky to go up to people making hundreds of thousands of dollars each year at the large AV companies and convince them to join a startup building an autonomous airport tractor in a garage in Sunnyvale.

How do you overcome that hesitation? How do you attract talent?

E: When people are considering joining a startup, they usually care about traction and culture. Traction means that you’re capable of building a product that people want to buy. Culture is a buzzy word that people toss around, but it makes a big difference.

At AeroVect, we have the ability to shape our culture. We’re not a 50-year-old company rife with office politics and entrenched hierarchies. We have a blank slate. We decided to make a big bet on creating the kind of open, enjoyable work environment that is so often the missing puzzle piece in many companies — I am convinced this has made a major difference in our ability to hire and retain top talent.

R: It takes a particularly convincing case to bring experienced folks on board. Their expertise gives them plenty of options. The whole package has to make sense for them — they often look for companies where they can leverage their expertise to build teams that make a difference. You have to create an environment where they can actualize that opportunity, lead in their areas of expertise, and actually have a say. That’s why we are very conscious of providing team members the room they need to make the right decisions in their areas of expertise.

What has surprised you about the process of launching AeroVect?

R: When we started AeroVect, we often received seemingly conflicting advice: some told us to focus on engineering, while others argued for a sales-first approach. At any point in our day-to-day, we could be thinking of numerous other variables too, including how to build an effective culture, scale product, and manage cash flow.

With only so many hours in each day, we’ve learned that it’s really about efficiently balancing the responsibilities in a structured way. You can’t focus on one area and ignore the others; you have to be able to efficiently prioritize your time across multiple time horizons, and consider the dependencies between various resources. Every day teaches us something new, and we’ve learned that it’s important to take a dynamic approach as we think about what to tackle next.

What advice do you have for first-time founders regarding fundraising?

E: When you’re fundraising, it’s easy to think that money is money — that it doesn’t really matter where money comes from, as long as someone gives it to you. That’s the wrong way to approach fundraising. Often the real value that investors provide is beyond capital.

You want investors to understand your business deeply, and to be able to provide the kind of guidance and advice you need as you scale your business. Xfund has been an incredible partner along this journey. Patrick and Brandon are terrific investors — we work with them very closely and rely on their expert advice and guidance as we tackle some of the most pressing challenges we face as a business.

Be very careful in terms of who you choose as an investor; it makes a night-and-day difference.

R: Fundraising is important because it helps you move major milestones forward, but at the end of the day, it’s about the customer. It’s about solving customer pain points and actually building reliable product that people can count on. That’s why we always partner with investors who are uniquely able to provide support beyond just the capital, and can help us uncover what is best for the markets we serve.

You launched AeroVect in the Bay Area. Is it still a good place to start a company?

R: It’s been a year and a half now that I’ve been living on and off in the Bay Area. The tech industry is dominant here, and it has very much accelerated our progress to have access to a community of founders and technologists to lean on who have all gone through various stages of the startup lifecycle.

We’re very fortunate to be a part of this wonderful tech ecosystem, though we do consistently remind ourselves to put our product in a holistic perspective. When we work with aviation for example, the customer’s day-to-day concern is getting the aircraft turned around: that means our autonomous driving system must integrate well enough to become an indispensable tool in the industry-specific operating workflow. Being able to understand that and draw upon a cross-disciplinary perspective helps us get to the root of the customer’s needs, rather than building tech for tech’s sake.

E: Silicon Valley isn’t just a good place to start a company, it’s the place to start a company. Recently there’s been a lot of talk about Silicon Valley and the Bay Area not being the future of the technology industry, as some leave Silicon Valley and California for lower COL areas of the country. Tech is becoming an increasingly relevant industry in the US as a whole, and it’s wonderful that cities around the country are becoming tech hubs. But for young people wanting to start a technology startup in 2021, especially in deep tech and autonomous vehicles, there’s no other place like the Bay Area.

For example, our neighbor in Sunnyvale also works on autonomous vehicles. He saw our autonomous tractor being delivered to our garage and we struck up a conversation, and he gave us great advice and made valuable introductions. This only happens in Silicon Valley. There’s no other place in the US where your neighbor also just happens to work in autonomous vehicles. This has been true on a broader scale — the network effects are very real. A lot of what we do is only possible because we are here.

What’s next for AeroVect?

R: As a startup, our roadmap is continuously evolving with a focus on solving big problems with scalable solutions. We’re excited about the potential of our aviation-grade autonomous driving system, not just for customers in aviation but also the broader logistics space overall. It’s definitely an exciting time to be growing our team and product at AeroVect!

Originally published at https://blog.xfund.com on January 9, 2022.

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An established venture capital investor, Patrick Chung serves as managing general partner at Xfund.

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Patrick Chung

Patrick Chung

An established venture capital investor, Patrick Chung serves as managing general partner at Xfund.

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